Great Post Office Scandal

I actually read this some time back, but it's taken me awhile to get all this written down. What follows is a rather long review on a book about an infuriating 'computer says no' situation and a deplorable cover-up.

The Wikipedia page for the Post Office Scandal describes it as "the most widespread miscarriage of justice in British legal history" and I think that is no exaggeration.

Despite its scale and the severity of the harm to those affected, it has almost flown under the radar. It gradually came to light between 2015 and 2021, but it just so happened those years were rather momentous years for the UK. Amidst the Brexit referendum in 2016 and associated Brexit drama till 2020, the various general elections and changes in Prime Ministers, and the pandemic and Ukraine war, I expect this complicated story about sub-postmasters, computer systems, and accounting will be known to few persons outside the UK and even within the UK cannot be said to be generally known.

Summary

Background on the Horizon system

In short, the UK Post Office (a wholly government-owned company) introduced a computer accounting system called Horizon in 1999 to better manage the money its post offices were taking in.

As anyone who has lived in the UK will know, a Post Office essentially acts as a government branch office. You can pay bills, apply for licences, passports, and various government documents, etc. You can also buy insurance, manage your telco plan, send money overseas, and do banking at a post office branch. Lots of cash goes through post offices. The UK Post Office naturally wanted to get a better idea of how much cash exactly and where it was at each point in time, and also avoid accounting mistakes and detect fraud or theft (if any).

The development and deployment of the Horizon system was troubled from the beginning since Fujitsu, the contractor, was picked because it was the lowest bidder, and appeared to realise too late that it had underbid. After various delays and many requests from the Post Office for changes to be made to the system or issues to be addressed, Horizon was rolled out to all post offices.

Most post offices are managed by sub-postmasters on a sort of franchise-like system. The sub-postmaster buys the post office and then runs it according to the Post Office's rules, and keeps all the profits. The sub-postmaster keeps the Post Office apprised of their accounting records and regularly send the Post Office cash collected on the Post Office's behalf (e.g. bank deposits, payment for stamps, etc.).

The Horizon system includes point-of-sale terminals and a backend. Sub-postmasters were given a few days of training on how to use the new point-of-sale terminals, and then were left to run their offices.

Issues with Horizon

There were various issues with Horizon: the terminals would sometimes freeze up, the interface was unintuitive, etc. But the most significant was that its accounting was not always accurate. Due to various software bugs, it would sometimes omit to store a transaction, double-count a transaction, etc. Over time, many sub-postmasters found that the amount of cash they had on hand did not match the figures Horizon had calculated — in other words, that they had a deficit.

Naturally, they would re-check their records, re-count their cash, keep a closer eye on employees to ensure the cash wasn't getting stolen, etc. but often the deficit could not be accounted for and would continue to grow over time. The helpline operators were also quite unhelpful and would suggest they 'not worry and wait for it to sort itself out' or direct the sub-postmaster to perform certain steps on the terminal that occasionally caused the deficit to double. The sub-postmaster would then be told they were liable for the deficit.

Many sub-postmasters came to the conclusion (or were told directly) that it was their own incompetency, or their staff's incompetency or dishonesty that was leading to the deficit, and chose to fix this problem by paying the deficit out of pocket. This was often thousands of pounds. But the problem never went away, and they would end up dipping into savings, taking loans from family members, etc. to pay the deficit, buying time and hoping to solve it.

Some sub-postmasters would deal with the ever-growing (and alarming) deficit by pressing a button indicating that the figures matched. Sometimes they were directed to do this by the hotline.

In any case, the sub-postmaster would eventually run out of cash, sometimes after depleting their life savings or their family's funds, and when the Post Office asked for the money to be remitted, they would be unable to pay.

Prosecution

At that point, the Post Office would prosecute the sub-postmaster (for historical reasons, the Post Office has its own prosecutors) for:

• false accounting (if they pressed the button indicating the figures matched); and/or
• theft of the money they were unable to pay

The Post Office's argument was essentially that the Horizon system indicated there was missing cash from the sub-postmaster's office and so in the absence of any other explanation, the sub-postmaster must have taken it. But it often didn't even need to run this argument in court because sub-postmaster would choose to plea guilty in an effort to avoid imprisonment or get a shorter sentence. Sub-postmasters chose to do this, despite not being guilty, because they felt they had no other choice — the thought that the Horizon system was at fault often never occurred to them and in any case they had no evidence of such fault.

Once a sub-postmaster was convicted, the Post Office would then seek a court order to seize the sub-postmaster's assets, often bankrupting them. Many sub-postmasters spent time in jail for crimes they did not do, lost their jobs, couldn't find employment, became bankrupt, got divorced, and developed health issues as a result of the stress and self-doubt. One sub-postmaster even committed suicide.

The Post Office prosecuted nearly a thousand sub-postmasters in this way.

Revelation

It took a meticulous, conscientious sub-postmaster for the scandal to come to light. Alan Bates refused to fall into any of the Post Office's traps by accepting the deficit or paying out of pocket, (*spoilers*) realised that the issue was with Horizon and not himself.

But getting justice for the many wronged sub-postmasters was an uphill battle. Bates had very little evidence of bugs in Horizon. Combined with the Post Office's reputation as a trustworthy institution and the fact some of the sub-postmasters had pleaded guilty (surely that means they must have done it), it was very challenging to get any political attention on the matter, and the Post Office continuously slung obstacles in the way right up till the very end.

The full extent of the scandal has yet to be revealed. A statutory inquiry is currently underway in the UK, and the Government has yet to decide whether it will take responsibility and/or compensate the sub-postmasters. Many of the key players, such as office-holders in the Post Office, Government, and in Fujitsu have yet to be held to account. I recommend following Nick Wallis's Post Office Scandal blog and Richard Moorhead's Thoughts on the Post Office Scandal for the latest developments.

Thoughts

This was an infuriating book to read. Whilst reading it I felt like a viewer watching an entirely predictable horror film: 'why would you decide to investigate that dark underground cellar alone despite all the rumours you've heard about it'. There was story after story about sub-postmasters happily buying new post offices, dealing with Horizon issues, deciding to dig themselves into deeper holes by paying out of pocket, not asking for lawyers when questioned by the Post Office because they have 'nothing to hide', etc.

It was also infuriating because the Post Office kept getting away with it. It would tell sub-postmasters that they were the only ones facing such issues and the issue must be on their end. It would ignore attempts to dispute the deficits. It would charge sub-postmasters on the flimsiest of evidence simply to recover the money it had supposedly lost. And because the sub-postmaster contract was so imbalanced and the Post Office had a reputation of trustworthiness, it would keep getting away with it.

When things began to unravel, the Post Office got more brazen and would repeatedly and publicly state that Horizon worked perfectly, it was impossible for Horizon to be wrong, and the sub-postmasters' convictions showed that Horizon's reliability had been tested in court.

When pressure from MPs led to the appointment of independent investigators, the Post Office stonewalled the investigation by refusing to provide access to its legal files or sufficient access to the Horizon systems. It also rebutted the independent report point-by-point, in many instances stating that there was no evidence for the investigator's conclusions (because it had ensured no such evidence was available) or that the conclusions were beyond the scope of the investigation.

The Bates v Post Office litigation was gripping, and Wallis' blow-by-blow coverage of the various witness testimonies and the legal arguments made is definitely worth reading. I had actually read part of the Common Issues judgment back in 2020 when studying obligations of good faith in contract law. Fraser J provides a good summary of the factors that suggest the existence of a relational contract and hence an implied obligation of good faith. But the judgment is an incredibly long and complicated one, and at the time I didn't quite grasp the context of the litigation and the miscarriages of justice that had gone on.

I found this scandal especially poignant because I think the underlying matter — individuals with less bargaining power dealing with an uncooperative, incompetent institution is something many of us can empathise with. It illustrates the dangers of a very unequal contractual relationship, even in favour of a public institution. The undeserved trust that people placed in the Post Office — by allowing it to run its own Prosecutions, believing it when it said the Horizon was flawless, etc. led to devastating consequences for many sub-postmasters.

The worrying thing is I am not convinced that it won't happen again. In the local context, in criminal cases, the Prosecution is in a much stronger position that the defendants in almost all situations. Amongst other things, they have much more resources at their command, they have the luxury of deciding when to bring charges and what charges to bring (so they are fully prepared when proceedings commence), and they have the benefit of a presumption of goodness. By the last I mean that the courts accord them a degree of trust — judges are more inclined to take the Prosecution at their word and give them the benefit of the doubt. The courts will presume that the Prosecution has done no wrong and acted in good faith unless, the defendant can prove otherwise — which a defendant will usually be hard-pressed to do.

On a more personal note, I find that these kind of computer says no situations involving persons wronged by an automated decision-making process and left with little recourse really speak to me. It's something I'm giving real thought to pursuing on a more formal basis.

It's infuriating that we know first-hand, and are repeatedly reminded of how poorly computers can behave, yet we keep trusting them to make decisions on their own that have very real consequences for humans. And the current AI obsession takes the craziness even further. We have enough trouble with hand-written software whose source code we can view and debug, yet we are already embracing black box AI solutions which give no reasons for their answers and whose decision-making process we cannot meaningfully understand.

AI works surprisingly well in some instances but will occasionally make unpredictable mistakes a human would not have thought of making. Today, the result might be that your credit card application is denied for no apparent reason or your social media account suspended because you uploaded the wrong cat photo or because you self-deprecatingly posted that you look like a potato. Very soon, such software mistakes could freeze your bank account and make life very difficult, or could lead a police robot to accidentally kill you.

Making software accountable, explainable, and reviewable — I think that's something that is very meaningful to be working on.